Indicate by check mark whether
the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.
See definition of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.

Large accelerated filer

x

Accelerated filer

¨

Non-accelerated filer

¨

Smaller reporting company

¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes ¨ No x

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date.

As of June 5, 2012, there were outstanding 49,041,259 shares of Class A Nonvoting Common Stock and 3,538,628 shares of Class B Voting Common Stock. The Class B Common Stock, all of
which is held by affiliates of the Registrant, is the only voting stock.

The condensed consolidated financial statements included herein have been prepared by
Brady Corporation and subsidiaries (the Company or Brady) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of the Company, the foregoing statements contain all
adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial position of the Company as of April 30, 2012 and July 3l, 2011, its results of operations for the three and nine months ended
April 30, 2012 and 2011, and its cash flows for the nine months ended April 30, 2012 and 2011. The condensed consolidated balance sheet as of July 31, 2011 has been derived from the audited consolidated financial statements of that
date. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts
therein. Due to the inherent uncertainty involved in making estimates, actual results in future periods may differ from the estimates.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with
GAAP have been omitted pursuant to rules and regulations of the Securities and Exchange Commission. Accordingly, the condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete
financial statement presentation. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Companys latest annual report on
Form 10-K for the year ended July 31, 2011.

In order to better allocate resources to align with sales growth initiatives, the Company reorganized its management
reporting structure within the EMEA and Asia-Pacific operating segments. As a result of the reorganization and in accordance with ASC 350, Intangibles  Goodwill and Other, the Companys reporting units for purposes of goodwill
impairment testing were updated during the quarter ended April 30, 2012. In the EMEA operating segment, the Emerging Platforms reporting unit was consolidated into the Brady EMEA and Direct Marketing EMEA reporting units. In the Asia-Pacific
operating segment, the North/South Asia reporting unit was divided into Brady North/South Asia and Die-Cut Asia. Further, Brady North/South Asia has been aggregated with Australia as part of the Brady Asia reporting unit. There were no changes to
the management structure within the Americas operating segment.

The Company performed the required initial (Step
One) impairment test over the new reporting units by preparing a discounted cash flow model taking into account current projections, estimates and assumptions. These estimates and assumptions primarily include, but are not limited to,
projections of revenue growth, operating earnings, discount rates, terminal growth rates, and required capital for the reporting unit. Due to the inherent uncertainty involved in making these estimates, actual results could differ materially from
the estimates. The estimated fair value of the reporting units was compared to the carrying amount including goodwill, and the results of the analysis indicated that there was no impairment as a result of the reorganization. Due to the
reorganization, the Company has identified six reporting units within its three reporting segments for purposes of the annual goodwill impairment analysis: Brady Americas, Direct Marketing Americas, Brady EMEA, Direct Marketing EMEA, Brady Asia, and
Die-Cut Asia.

Prior to the reorganization effective April 1, 2012, the Company had identified seven reporting units
within its three reporting segments for purposes of the annual goodwill impairment analysis: Brady Americas, Direct Marketing Americas, Brady Europe, Direct Marketing Europe, Emerging Platforms Europe, North/South Asia, and Australia.
The Companys goodwill is tested for impairment annually, or more frequently if events or changes in circumstances indicate that goodwill might be impaired. The Company performs
impairment reviews for its reporting units using the discounted cash flow model and market multiples model, as these methods provide a reasonable and meaningful fair value estimate based on the reporting units projections of future operating
results and cash flows and replicates how market participants would value the Companys reporting units. The projections of future operating results are based on both past performance and the projections and assumptions used in the
Companys current and long-range operating plans. The Companys estimates can be materially impacted by factors such as significant negative industry or economic trends, disruptions to the Companys business, competitive forces, or
changes in significant customers.

In the quarter ended January 31, 2012, the former North/South Asia reporting unit experienced a sales decline
and margin erosion due in large part to a major customers loss of market share within the mobile handset industry. The impact of this sales decline was partially offset by additional opportunities within the mobile handset and other computing
devices markets, but these sales were achieved at a lower gross margin percentage than was previously realized.

The Companys plans to fill capacity and absorb overhead with these additional sales
opportunities were partially successful; however, increased competition from local competitors drove down unit prices. While the Company continued to capture similar dollar value of sales, the gross margins were less than what was anticipated. The
Company placed increased focus on cost reduction and material procurement strategies to reduce cost of goods sold; however, these efforts were not enough to return the reporting unit to previous levels of profitability. Based upon the economic
environment within the mobile handset market, management determined that the events were not temporary and gross margins in the mobile handset market were not likely to improve materially in the near term.

Due to the convergence of these events, in connection with a reforecast of expected fiscal 2012 financial results completed during the
quarter ended January 31, 2012, the Company determined the foregoing circumstances to be indicators of potential impairment under the guidance of ASC 350, Intangibles  Goodwill and Other. The Company completed the required
initial (Step One) impairment test for the former North/South Asia reporting unit by preparing a discounted cash flow model taking into account updated projections, estimates and assumptions. These estimates and assumptions primarily
included, but are not limited to, projections of revenue growth, operating earnings, discount rates, terminal growth rates, and required capital for the reporting unit. Due to the inherent uncertainty involved in these estimates, actual results
could differ materially from the estimates. The Company evaluated the significant assumptions used to determine the fair value of the reporting unit with the assistance of a third party valuation firm and concluded that they were reasonable.

The estimated fair value of the reporting unit was compared to the carrying amount including goodwill, and the results of the
analysis indicated that the former North/South Asia reporting unit was potentially impaired. Therefore, the Company proceeded to measure the amount of the potential impairment (Step Two) with the assistance of a third party valuation
firm. In Step Two of the goodwill impairment test, the Company determined the implied fair value of the goodwill and compared it to the carrying value of the goodwill. The Company allocated the fair value of the former North/South Asia reporting
unit to all of its assets and liabilities as if the reporting unit had been acquired in a business combination. The excess fair value of the reporting unit over the fair value of its identifiable assets and liabilities was the implied fair value of
goodwill. Upon completion of the assessment, the Company recognized a goodwill impairment charge of $115,688 during the quarter ended January 31, 2012.

The changes in the carrying amount of goodwill by reportable segment for the nine months ended April 30, 2012, are as follows:

Americas

Europe

Asia-Pacific

Total

Balance as of July 31, 2011

$

425,578

$

171,238

$

203,527

$

800,343

Current year acquisitions



1,227



1,227

Translation adjustments

(5,409

)

(10,521

)

(3,529

)

(19,459

)

Impairment charge





(115,688

)

(115,688

)

Balance as of April 30, 2012

$

420,169

$

161,944

$

84,310

$

666,423

Goodwill decreased $133,920 during the nine months ended April 30, 2012. Of the $133,920 decrease, $115,688 was
due to the goodwill impairment charge recognized on the former North/South Asia reporting unit, and $19,459 was due to foreign currency translation. The decrease was partially offset by an increase of $1,227 from the acquisition of Grafo Wiremarkers
Africa (Proprietary) Limited (Grafo) during the third quarter of fiscal 2012. Refer to Note L, Acquisitions and Divestitures for further discussion.

Other intangible assets include patents, trademarks, customer relationships, non-compete agreements and other intangible assets with finite lives being amortized in accordance with accounting guidance for
goodwill and other intangible assets. The net book value of these assets was as follows:

The value of goodwill and other intangible assets in the Condensed Consolidated Balance
Sheet at April 30, 2012, differs from the value assigned to them in the allocation of purchase price due to amortization, impairment charges, and the effect of fluctuations in the exchange rates used to translate financial statements into the
United States Dollar between the date of acquisition and April 30, 2012. The acquisition completed during the nine months ended April 30, 2012, increased the customer relationships by $961. Refer to Note L, Acquisitions and
Divestitures for further discussion.

Amortization expense on intangible assets was $3,944 and $5,117 for the
three-month periods ended April 30, 2012 and 2011, respectively, and $12,102 and $15,387 for the nine-month periods ended April 30, 2012 and 2011, respectively. Annual amortization expense is projected to be $16,205, $10,381, $5,466,
$5,128 and $4,058 for the years ending July 31, 2012, 2013, 2014, 2015 and 2016, respectively. The amount of amortization expense recognized in the periods indicated will differ due to acquisitions, divestitures, impairment charges, and the
effect of fluctuations in the exchange rates used to translate financial statements into the United States Dollar.

NOTE C  Comprehensive Income (Loss)

Total comprehensive income (loss) for the periods presented was as follows:

Three Months
EndedApril 30,

Nine Months EndedApril 30,

2012

2011

2012

2011

Net income (loss)

$

27,652

$

28,589

$

(29,570

)

$

79,069

Unrealized (loss) gain on cash flow hedges

(499

)

(315

)

1,179

(1,206

)

Amortization of (gain) loss on post-retirement medical plans

(391

)

(31

)

124

(126

)

Foreign currency translation adjustments (1)

(3,936

)

30,512

(34,769

)

60,267

Total comprehensive income (loss)

$

22,826

$

58,755

$

(63,036

)

$

138,004

(1)

The change in foreign currency translation adjustments for the three and nine months ended April 30, 2012, compared to the same periods in the prior year, was
primarily due to a decrease in the exchange rates used to translate the Euro into the United States dollar.

NOTE D  Net Income (Loss) Per Common Share

Reconciliations of the numerator and denominator of the basic and diluted per share computations for the Companys
Class A and Class B common stock are summarized as follows:

Three Months
EndedApril 30,

Nine Months
EndedApril 30,

2012

2011

2012

2011

Numerator: (in thousands)

Net income (loss)

$

27,652

$

28,589

$

(29,570

)

$

79,069

Less:

Restricted stock dividends

(57

)

(56

)

(172

)

(168

)

Numerator for basic and diluted Class A net income (loss) per share

$

27,595

$

28,533

$

(29,742

)

$

78,901

Less:

Preferential dividends





(818

)

(820

)

Preferential dividends on dilutive stock options





(5

)

(6

)

Numerator for basic and diluted Class B net income (loss) per share

$

27,595

$

28,533

$

(30,565

)

$

78,075

Denominator: (in thousands)

Denominator for basic net income (loss) per share for both Class A and Class B

52,513

52,701

52,539

52,581

Plus: Effect of dilutive stock options

490

636



486

Denominator for diluted net income (loss) per share for both Class A and Class B

In accordance with ASC 260, Earnings per Share, dilutive options for the
nine-month period ended April 30, 2012, were not included in the computation of diluted net loss per share since to do so would reduce the calculated loss per share. Options to purchase approximately 3,182,000 and 4,419,000 shares of
Class A Nonvoting Common Stock for the three and nine months ended April 30, 2012, respectively, were not included in the computation of diluted net income (loss) per share because the impact of the inclusion of the options would have been
anti-dilutive.

Options to purchase approximately 2,500,000 and 3,100,000 shares of Class A Nonvoting Common Stock for
the three and nine months ended April 30, 2011, respectively, were not included in the computation of diluted net income per share because the impact of the inclusion of the options would have been anti-dilutive.

NOTE E  Segment Information

The Company evaluates short-term segment performance based on segment profit or loss and customer sales. Segment profit
or loss does not include certain administrative costs, such as the cost of finance, information technology and human resources, which are managed as global functions. Restructuring charges, impairment charges, stock options, interest, investment and
other income and income taxes are also excluded when evaluating performance.

The Company is organized and managed on a
geographic basis by region. Each of these regions, Americas, EMEA and Asia-Pacific, has a President that reports directly to the Companys chief operating decision maker, its Chief Executive Officer. Each region has its own distinct operations,
is managed by its own management team, maintains its own financial reports and is evaluated based on regional segment profit. The Company has determined that these regions comprise its operating and reportable segments based on the information used
by the Chief Executive Officer to allocate resources and assess performance.

Intersegment sales and transfers are recorded at
cost plus a standard percentage markup. Intercompany profit is eliminated in consolidation. It is impracticable to disclose enterprise-wide revenue from external customers on the basis of product or service because the Company is organized and
managed on a geographic basis by region, each of which has its own distinct operations and is managed locally by its own management team.

Following is a summary of segment information for the three and nine months ended April 30, 2012 and 2011:

Americas

EMEA

Asia-Pacific

Total Region

CorporateandEliminations

Totals

Three months ended April 30, 2012:

Revenues from external customers

$

150,629

$

97,938

$

83,062

$

331,629

$



$

331,629

Intersegment revenues

9,995

747

7,672

18,414

(18,414

)



Segment profit

38,887

25,571

6,598

71,056

(388

)

70,668

Three months ended April 30, 2011:

Revenues from external customers

$

149,217

$

105,894

$

82,785

$

337,896

$



$

337,896

Intersegment revenues

9,938

696

5,960

16,594

(16,594

)



Segment profit

38,292

28,938

9,976

77,206

(3,561

)

73,645

Nine months ended April 30, 2012:

Revenues from external customers

$

442,896

$

290,887

$

267,938

$

1,001,721

$



$

1,001,721

Intersegment revenues

30,211

2,779

22,435

55,425

(55,425

)



Segment profit

117,914

78,432

27,635

(1)

223,981

(6,009

)

217,972

Nine months ended April 30, 2011:

Revenues from external customers

$

431,216

$

301,985

$

263,292

$

996,493

$



$

996,493

Intersegment revenues

30,729

2,209

18,306

51,244

(51,244

)



Segment profit

108,666

82,165

38,330

229,161

(12,087

)

217,074

(1)

The Company recognized a goodwill impairment charge of $115,688 during the quarter ended January 31, 2012, related to the former North/South Asia reporting unit
within the Asia-Pacific reporting segment, which is excluded from segment profit as presented in the table above. Refer to Note B, Goodwill and Intangible Assets for further discussion.

Following is a reconciliation of segment profit to net income (loss) for the three months
and nine months ended April 30, 2012 and 2011:

Three months
endedApril 30,

Nine months
endedApril 30,

2012

2011

2012

2011

Total profit from reportable segments

$

71,056

$

77,206

$

223,981

$

229,161

Corporate and eliminations

(388

)

(3,561

)

(6,009

)

(12,087

)

Unallocated amounts:

Administrative costs

(26,275

)

(31,563

)

(85,999

)

(90,534

)

Restructuring charges

(3,440

)

(1,211

)

(3,440

)

(6,986

)

Impairment charge





(115,688

)



Investment and other income

1,110

1,428

1,720

2,892

Interest expense

(4,735

)

(5,103

)

(14,715

)

(16,640

)

Income (loss) before income taxes

37,328

37,196

(150

)

105,806

Income taxes

(9,676

)

(8,607

)

(29,420

)

(26,737

)

Net income (loss)

$

27,652

$

28,589

$

(29,570

)

$

79,069

NOTE F  Stock-Based Compensation

The Company has an incentive stock plan under which the Board of Directors may
grant nonqualified stock options to purchase shares of Class A Nonvoting Common Stock or grant restricted shares of Class A Nonvoting Common Stock to employees and non-employee directors. The stock options have an exercise price equal to
the fair market value of the underlying stock at the date of grant and generally vest ratably over a three-year period, with one-third becoming exercisable one year after the grant date and one-third additional in each of the succeeding two years.
Stock options issued under these plans, referred to herein as service-based stock options, generally expire 10 years from the date of grant. The Company also grants stock options to certain executives and key management employees
that vest upon meeting certain financial performance conditions over the vesting schedule described above; these options are referred to herein as performance-based stock options. Performance-based stock options expire 10 years from
the date of grant. The Company granted restricted shares in fiscal 2008 and fiscal 2011 that have an issuance price equal to the fair market value of the underlying stock at the date of grant. The restricted shares granted in fiscal 2008 were
amended in fiscal 2011 to allow for vesting after a seven-year period upon meeting both performance and service conditions. The restricted shares granted in fiscal 2011 vest ratably at the end of years three, four and five upon meeting certain
performance and service conditions. The restricted shares granted in fiscal 2008 and 2011 are referred to herein as performance-based restricted shares.

As of April 30, 2012, the Company has reserved 6,776,947 shares of Class A Nonvoting Common Stock for
outstanding stock

options and restricted shares and 4,950,950 shares of Class A Nonvoting Common Stock for future issuance of stock
options and restricted shares under the various plans. The Company uses treasury stock or will issue new Class A Nonvoting Common Stock to deliver shares under these plans.

The Company recognizes the compensation cost of all share-based awards on a straight-line basis over the vesting period of the award.
Compensation expense for performance-based stock options is recorded over the remaining vesting period when the Company determines that it is probable that the performance criteria will be met. Total stock compensation expense recognized by the
Company during the three months ended April 30, 2012 and 2011 was $2,102 ($1,282 net of taxes) and $2,527 ($1,541 net of taxes), respectively, and expense recognized during the nine months ended April 30, 2012 and 2011 was $7,592 ($4,631
net of taxes), and $9,396 ($5,732 net of taxes), respectively. As of April 30, 2012, total unrecognized compensation cost related to share-based compensation awards was $16,022 pre-tax, net of estimated forfeitures, which the Company expects to
recognize over a weighted-average period of 2.0 years.

The Company has estimated the fair value of its service-based and performance-based option
awards granted during the nine months ended April 30, 2012 and 2011 using the Black-Scholes option valuation model. The weighted-average assumptions used in the Black-Scholes valuation model are reflected in the following table:

Nine Months EndedApril 30,
2012

Nine Months EndedApril 30,
2011

Black-Scholes Option Valuation Assumptions

Service-BasedOptionAwards

Performance-Based
OptionAwards

Service-BasedOptionAwards

Performance-Based
OptionAwards

Expected term (in years)

5.89

6.57

5.91

6.57

Expected volatility

39.41

%

39.21

%

40.22

%

39.39

%

Expected dividend yield

2.07

%

1.99

%

1.94

%

1.96

%

Risk-free interest rate

1.16

%

2.05

%

1.65

%

2.35

%

Weighted-average market value of underlying stock at grant date

$

27.05

$

29.55

$

29.10

$

28.43

Weighted-average exercise price

27.05

29.55

29.10

28.35

Weighted-average fair value of options granted during the period

8.42

10.01

9.58

9.87

The Company uses historical data regarding stock option exercise behaviors to estimate the expected term of options
granted based on the period of time that options granted are expected to be outstanding. Expected volatilities are based on the historical volatility of the Companys stock. The expected dividend yield is based on the Companys historical
dividend payments and historical yield. The risk-free interest rate is based on the U.S. Treasury yield curve in effect on the grant date for the length of time corresponding to the expected term of the option. The market value is calculated as the
average of the high and the low stock price on the date of the grant.

The Company granted 100,000 shares of performance-based
restricted stock to Frank M. Jaehnert, the Companys President and Chief Executive Officer, in August of 2010, with a grant price and fair value of $28.35. The Company also granted 210,000 shares of performance-based restricted stock during
fiscal 2008, with a grant price and fair value of $32.83. As of April 30, 2012, 310,000 performance-based restricted shares were outstanding.

The Company granted 415,000 performance-based stock options during the nine months ended April 30, 2012, with a weighted average exercise price of $29.55 and a weighted average fair value of $10.01.
The Company also granted 797,450 service-based stock options during the nine months ended April 30, 2012, with a weighted average exercise price of $27.05 and a weighted average fair value of $8.42.

A summary of stock option activity under the Companys share-based compensation plans for the nine months ended April 30, 2012
is presented below:

Options

Shares

WeightedAverageExercise Price

WeightedAverageRemainingContractualTerm

AggregateIntrinsicValue

Outstanding at July 31, 2011

5,726,017

$

29.24

New grants

1,212,450

$

27.91

Exercised

(254,357

)

$

20.15

Forfeited or expired

(217,163

)

$

32.92

Outstanding at April 30, 2012

6,466,947

$

29.22

6.5

$

22,069

Exercisable at April 30, 2012

3,848,048

$

29.67

5.0

$

14,972

There were 3,848,048 and 3,359,215 options exercisable with a weighted average exercise price of $29.67 and $29.70 at
April 30, 2012 and 2011, respectively. The cash received from the exercise of options during the quarters ended April 30, 2012 and 2011 was $1,441 and $2,244, respectively. The cash received from the exercise of options during the nine
months ended April 30, 2012 and 2011 was $3,624 and $7,154, respectively. The cash received from the tax benefit on stock options exercised during the quarter ended April 30, 2012 and 2011 was $166 and $695, respectively. The cash received
from the tax benefit on options exercised during the nine months ended April 30, 2012 and 2011 was $761 and $1,398, respectively.

The total intrinsic value of options exercised during the nine months ended April 30,
2012 and 2011, based upon the average market price at the time of exercise during the period, was $2,987 and $4,907, respectively. The total fair value of stock options vested during the nine months ended April 30, 2012 and 2011, was $8,035 and
$6,775, respectively.

NOTE G  Stockholders Investment

In fiscal 2009, the Companys Board of Directors authorized a share repurchase plan for the Companys
Class A Nonvoting Common Stock. The plan was implemented by purchasing shares in the open market or in privately negotiated transactions, with repurchased shares available for use in connection with the Companys stock-based plans and for
other corporate purposes. The Company did not repurchase any shares during fiscal 2011. As of July 31, 2011, there remained 204,133 shares to purchase in connection with this share repurchase plan.

On September 9, 2011, the Companys Board of Directors authorized an additional share repurchase program for up to two million
additional shares of the Companys Class A Nonvoting Common Stock. The plan may be implemented by purchasing shares in the open market or in privately negotiated transactions, with repurchased shares available for use in connection with
the Companys stock-based compensation plans and for other corporate purposes. During the three months ended October 31, 2011, the Company purchased 457,360 shares of its Class A Nonvoting Common Stock under the plans for $12,309. No
shares were repurchased by the Company in the quarters ended January 31, 2012 and April 30, 2012, and there remained 1,746,773 shares to purchase in connection with the 2011 share repurchase plan.

NOTE H  Employee Benefit Plans

The Company provides postretirement medical benefits for eligible
regular full and part-time domestic employees (including spouses) outlined by the plan. Postretirement benefits are provided only if the employee was hired prior to April 1, 2008, and retires on or after attainment of age 55 with 15 years of
credited service. Credited service begins accruing at the later of age 40 or date of hire. All active employees first eligible to retire after July 31, 1992, are covered by an unfunded, contributory postretirement healthcare plan where employer
contributions will not exceed a defined dollar benefit amount, regardless of the cost of the program. Employer contributions to the plan are based on the employees age and service at retirement.

The Company funds benefit costs on a pay-as-you-go basis. There have been no changes to the components of net periodic benefit cost or
the amount that the Company expects to fund in fiscal 2012 from those reported in Note 3 to the consolidated financial statements included in the Companys latest annual report on Form 10-K for the year ended July 31, 2011.

NOTE I  Fair Value Measurements

In accordance with fair value accounting guidance, the Companys
assets and liabilities measured at fair market value are classified in one of the following categories:

Level 1 
Assets or liabilities for which fair value is based on quoted market prices in active markets for identical instruments as of the reporting date.

Level 2  Assets or liabilities for which fair value is based on valuation models for which pricing inputs were either directly or indirectly observable.

Level 3  Assets or liabilities for which fair value is based on valuation models with significant unobservable pricing inputs
and which result in the use of management estimates.

The following tables set forth by level within the fair value hierarchy, the Companys
financial assets and liabilities that were accounted for at fair value on a recurring basis at April 30, 2012, and July 31, 2011, according to the valuation techniques the Company used to determine their fair values:

Fair Value Measurements Using InputsConsidered As

QuotedPricesin
ActiveMarkets forIdenticalAssets(Level 1)

SignificantOtherObservableInputs(Level 2)

SignificantUnobservableInputs(Level 3)

Fair Values

Balance Sheet Classifications

April 30, 2012:

Trading Securities

$

12,759

$



$



$

12,759

Other assets

Foreign exchange contracts  cash flow hedges



181



181

Prepaid expenses and other current assets

Foreign exchange contracts  non-designated



23



23

Prepaid expenses and other current assets

Foreign exchange contracts  net investment hedges









Prepaid expenses and other current assets

Total Assets

$

12,759

$

204

$



$

12,963

Foreign exchange contracts  cash flow hedges

$



$

144

$



$

144

Other current liabilities

Foreign exchange contracts  net investment hedges



23



23

Other current liabilities

Foreign exchange contracts  non-designated









Other current liabilities

Foreign currency denominated debt  net investment hedge



99,398



99,398

Long term obligations, less current maturities

Total Liabilities

$



$

99,565

$



$

99,565

July 31, 2011:

Trading Securities

$

10,897

$



$



$

10,897

Other assets

Foreign exchange contracts  cash flow hedges



16



16

Prepaid expenses and other current assets

Foreign exchange contracts  non-designated



3



3

Prepaid expenses and other current assets

Total Assets

$

10,897

$

19

$



$

10,916

Foreign exchange contracts  cash flow hedges

$



$

830

$



$

830

Other current liabilities

Foreign exchange contracts  net investment hedges



5,295



5,295

Other current liabilities

Foreign exchange contracts  non-designated



2



2

Other current liabilities

Foreign currency denominated debt  net investment hedge



107,985



107,985

Long term obligations less current maturities

Total Liabilities

$



$

114,112

$



$

114,112

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Trading Securities: The Companys deferred compensation investments consist of investments in mutual funds. These investments
were classified as Level 1 as the shares of these investments trade with sufficient frequency and volume to enable the Company to obtain pricing information on an ongoing basis.

Foreign currency exchange contracts: The Companys foreign currency exchange contracts were classified as Level 2, as the
fair value was based on the present value of the future cash flows using external models that use observable inputs, such as interest rates, yield curves and foreign currency exchange rates. See Note K, Derivatives and Hedging Activities
for additional information.

Foreign currency denominated debt  net investment hedge: The Companys foreign
currency denominated debt designated as a net investment hedge was classified as Level 2, as the fair value was based on the present value of the future cash flows using external models that use observable inputs, such as interest rates, yield
curves and foreign currency exchange rates. See Note K, Derivatives and Hedging Activities for additional information.

There were no transfers of assets or liabilities between the fair value hierarchy levels, outlined above, during the nine months ended April 30, 2012.

The Companys financial instruments, other than those presented in the disclosures above, include cash, accounts receivable,
accounts payable, accrued liabilities and short-term and long-term debt. The fair values of cash, accounts receivable, accounts payable, and accrued liabilities approximated carrying values because of the short-term nature of these instruments.

The estimated fair value of the Companys long-term obligations including current
maturities, based on the quoted market prices for similar issues and on the current rates offered for debt of similar maturities, was $363,616 and $416,694 at April 30, 2012 and July 31, 2011, respectively, as compared to the carrying
value of $342,076 and $393,178 at April 30, 2012 and July 31, 2011, respectively.

During the nine months ended
April 30, 2012, goodwill with a carrying amount of $163,702 in the former North/South Asia reporting unit was written down to its estimated implied fair value of $48,014, resulting in a non-cash impairment charge of $115,688. The implied fair
value of goodwill of $48,014 represents a Level 3 asset measured at fair value on a nonrecurring basis subsequent to its original recognition. Refer to Note B, Goodwill and Intangible Assets for further information regarding the
valuation inputs.

During the nine months ended April 30, 2011, the Company had no significant measurements of assets or
liabilities at fair value on a nonrecurring basis subsequent to their initial recognition other than for the acquisition of ID Warehouse, and the divestiture of the Teklynx business. Refer to Note L, Acquisitions and Divestitures for
further information.

NOTE J  Restructuring

During the three months ended April 30, 2012, the Company took various measures to address its cost structure in
response to weaker sales forecasts across the Company, as well as the decline in operating results in the Asia die-cut business. As a result of these actions, the Company recorded restructuring charges of $3,440, which consisted of $2,469 of
employee separation costs, $458 of fixed asset write-offs, and $513 of other facility closure related costs. Of the $3,440 of restructuring charges recorded during the three months ended April 30, 2012, $1,709 was incurred in the Americas,
$1,601 was incurred in EMEA, and $130 was incurred in Asia-Pacific. The charges for employee separation costs consisted of severance pay, outplacement services, medical and other related benefits. The costs related to these restructuring activities
have been recorded on the condensed consolidated statements of income as restructuring charges. The Company expects the majority of the remaining cash payments to be made during the next twelve months.

In fiscal 2009, in response to the global economic downturn, the Company took several measures to address its cost structure. In addition
to a company-wide salary freeze and decreased discretionary spending, the Company reduced its workforce by 25%. The Company reduced its workforce through voluntary and involuntary separation programs, voluntary retirement programs, and facility
consolidations. The Company continued the execution of its restructuring actions during fiscal 2011. These actions included a reduction in its contract labor and decreased discretionary spending. As a result of these actions, the Company recorded
restructuring charges of $1,211 and $6,986 during the three and nine months ended April 30, 2011, respectively. The restructuring charges of $6,986 during the nine months ended April 30, 2011 consisted of $4,531 of employee separation
costs, $2,155 of fixed asset write-offs, and $300 of other facility closure related costs and contract termination costs. Of the $6,986 of restructuring charges recorded during the nine months ended April 30, 2011, $4,401 was incurred in the
Americas, $2,457 was incurred in Europe, and $128 was incurred in Asia-Pacific.

A reconciliation of the Companys
restructuring activity during the nine months ended April 30, 2012 is as follows:

EmployeeRelated

AssetWrite-offs

Other

Total

Beginning balance, July 31, 2011

$

2,207

$



$

49

$

2,256

Restructuring charge

2,469

458

513

3,440

Non-cash write-offs



(458

)



(458

)

Cash payments

(2,464

)



(490

)

(2,954

)

Ending balance, April 30, 2012

$

2,212

$



$

72

$

2,284

NOTE K  Derivatives and Hedging Activities

The Company utilizes forward foreign exchange currency contracts to reduce the exchange rate risk
of specific foreign currency denominated transactions and net investments. These contracts typically require the exchange of a foreign currency for U.S. dollars at a fixed rate at a future date, with maturities of 18 months or less, which
qualify as either cash flow hedges or net investment hedges under the accounting guidance for derivative instruments and hedging activities. The primary objectives of the Companys foreign currency exchange risk management are to minimize the
impact of currency movements due to products purchased in other than the respective subsidiaries functional currency and to minimize the impact of currency movements on the Companys net investment denominated in a currency other than the
U.S. dollar. To achieve this objective, the Company hedges a portion of known exposures using forward foreign exchange currency contracts. As of April 30, 2012 and July 31, 2011, the notional amount of outstanding forward exchange
contracts was $50,999 and $80,807, respectively.

Hedge effectiveness is determined by how closely the changes in the fair value of the
hedging instrument offset the changes in the fair value or cash flows of the hedged item. Hedge accounting is permitted only if the hedging relationship is expected to be highly effective at the inception of the hedge and on an on-going basis. Gains
or losses on the derivative related to hedge ineffectiveness are recognized in current earnings. The amount of hedge ineffectiveness was not significant for the three-month or nine-month periods ended April 30, 2012 and 2011.

The Company hedges a portion of known exposure using forward exchange contracts. Main exposures are related to transactions denominated
in the British Pound, the Euro, Canadian Dollar, Australian Dollar, Singapore Dollar, Malaysian Ringgit, Swedish Krona, Japanese Yen, Swiss Franc, and the Korean Won. Generally, these risk management transactions will involve the use of foreign
currency derivatives to protect against exposure resulting from sales and identified inventory or other asset purchases.

The
Company has designated a portion of its foreign exchange contracts as cash flow hedges and recorded these contracts at fair value on the Condensed Consolidated Balance Sheets. For these instruments, the effective portion of the gain or loss on the
derivative is reported as a component of other comprehensive income (OCI) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. At April 30, 2012 and July 31, 2011,
unrealized gains of $177 and unrealized losses of $1,535 have been included in OCI, respectively. All balances are expected to be reclassified from OCI to earnings during the next twelve months when the hedged transactions impact earnings.

At April 30, 2012 and July 31, 2011, the Company had $181 and $16 of forward exchange contracts designated as cash
flow hedges included in Prepaid expenses and other current assets on the accompanying condensed consolidated balance sheets. At April 30, 2012 and July 31, 2011, the Company had $144 and $830, respectively, of forward exchange
contracts designated as cash flow hedges included in Other current liabilities on the accompanying Condensed Consolidated Balance Sheets. At April 30, 2012 and July 31, 2011, the U.S. dollar equivalent of these outstanding
forward foreign exchange contracts totaled $24,326 and $30,519, respectively, including contracts to sell Euros, Canadian Dollars, Australian Dollars, British Pounds, U.S. Dollars, and Swiss Franc.

The Company has also designated intercompany and third party foreign currency denominated debt instruments as net investments hedges.
During the nine months ended April 30, 2012, the Company designated 4,581 of intercompany loans as net investment hedges to hedge portions of its net investment in European foreign operations. No intercompany loans were designated as net
investment hedges as of July 31, 2011. On May 13, 2010, the Company completed the private placement of 75.0 million aggregate principal amount of senior unsecured notes to accredited institutional investors. This
Euro-denominated debt obligation was designated as a net investment hedge to hedge portions of the Companys net investment in Euro-denominated foreign operations. As net investment hedges, the currency effects of the debt obligations are
reflected in the foreign currency translation adjustments component of accumulated other comprehensive income where they offset gains and losses recorded on the Companys net investment in Euro-denominated operations. The Companys foreign
denominated debt obligations are valued under a market approach using publicized spot prices.

Additionally, the Company
utilizes forward foreign exchange currency contracts designated as hedge instruments to hedge portions of the Companys net investments in foreign operations. For hedges that meet the effectiveness requirements, the net gains or losses
attributable to changes in spot exchange rates are recorded in the foreign exchange translation adjustment component of accumulated other comprehensive income where it offsets gains and losses recorded on the Companys net investment in
Euro-denominated foreign operations. Any ineffective portions are recognized in earnings. Recognition in earnings of amounts previously recorded in cumulative translation is limited to circumstances such as complete or substantially complete
liquidation of the net investment in the foreign operation. At April 30, 2012, and July 31, 2011, the Company had $23 and $5,295, respectively, of forward foreign exchange currency contracts designated as net investment hedges included in
Other current liabilities on the accompanying Condensed Consolidated Balance Sheets. At April 30, 2012 and July 31, 2011, the U.S dollar equivalent of these outstanding forward foreign exchange contracts totaled $12,999 and
$50,000, respectively, including contracts to sell Euros, Singapore Dollars, and Malaysian Ringgit.

The pre-tax effects of derivative instruments not designated as hedge instruments on the Condensed Consolidated
Statements of Income consisted of the following:

Amount of Gain or (Loss) Recognized inIncome on Derivative

Derivatives Not Designated as Hedging Instruments

Location of Gain or (Loss)Recognized in Incomeon Derivative

Nine monthsended April
30,2012

Nine monthsended April
30,2011

Foreign exchange contracts

Other income (expense)

$

227

$

(953

)

Total

$

227

$

(953

)

NOTE L  Acquisitions and Divestitures

In March 2012, the Company acquired Grafo Wiremarkers Africa (Proprietary) Limited
(Grafo), based in Johannesburg, South Africa for $3,039. Grafo offers a comprehensive range of wire identification products and is the sole distributor in Africa of locally developed
Dartag® ABS cablemarkers, and stainless steel ties and tags. Grafo has annual sales of approximately $3,000 and
is included in the Companys EMEA segment. The purchase price allocation resulted in $1,227 assigned to goodwill, and $961 assigned to customer relationships. The amount assigned to the customer relationships is being amortized over seven
years. The Company expects the acquisition to provide a base in South Africa where it can further expand its business with the established distributors and customers throughout South Africa and the Southern African Development Community (SADC)
countries.

The results of the operations of the acquired business have been included since the respective date of acquisition
in the accompanying condensed consolidated financial statements. The Company is continuing to evaluate the initial purchase price allocations for the acquisitions completed within the past 12 months and will adjust the allocations as additional
information relative to the fair value of assets and liabilities of the acquired businesses becomes known. Pro-forma information related to the acquisition during the nine months ended April 30, 2012, is not included because the impact on the
Companys consolidated results of operations is considered immaterial.

In November 2010, the Company acquired ID
Warehouse, based in New South Wales, Australia for $7,970. ID Warehouse offers security identification and visitor management products including identification card printers, access control cards, wristbands, tamper-evident security seals and
identification accessories. The business is included in the Companys Asia-Pacific segment.

In December 2010, the
Company sold its Teklynx business, a barcode software company. The Teklynx business had operations primarily in the Companys Americas and EMEA segments. The Company received proceeds of $12,979, net of cash retained in the business. The
transaction resulted in a pre-tax gain of $4,394, which was accounted for in Selling, general, and administrative expenses (SG&A) on the Condensed Consolidated Statement of Income for the nine month period ended
April 30, 2011. The divestiture of Teklynx was part of the Companys continued long-term growth strategy to focus the Companys energies and resources on growth of the Companys core business.

In May 2012, the Company acquired Runelandhs Försäljnings AB (Runelandhs), based in Kalmar,
Sweden for approximately $24,000. Runelandhs is a direct marketer of industrial and office equipment with annual sales of approximately $19,000. Its products include lifting, transporting, and warehouse equipment; workbenches and material handling
supplies; products for environmental protection; and entrance, reception, and office furnishings.

In May 2012, the Company
acquired Pervaco AS (Pervaco), based in Kjeller, Norway for approximately $12,000. Pervaco is a direct marketer of facility identification products with annual sales of approximately $6,000.

On May 15, 2012, the Board of Directors declared a quarterly cash dividend to shareholders of the Companys Class A and
Class B Common Stock of $0.185 per share payable on July 31, 2012, to shareholders of record at the close of business on July 10, 2012.

NOTE N  New Accounting Pronouncements

In September 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update
(ASU) No. 2011-08, Intangibles  Goodwill and Other (Topic 350), Testing Goodwill for Impairment, which permits an entity to make a qualitative assessment of whether it is more likely than not that a reporting
units fair value is less than its carrying value before applying the two-step goodwill impairment model that is currently in place. If it is determined through the qualitative assessment that a reporting units fair value is more likely
than not greater than its carrying value, the remaining impairment steps would be unnecessary. The qualitative assessment is optional, allowing companies to go directly to the quantitative assessment. This update is effective for annual and interim
goodwill impairment tests performed in fiscal years beginning after December 15, 2011, with early adoption permitted. The Company does not expect adoption of this ASU to have a material impact on the Companys results of operations,
financial position or cash flow.

In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income,
which eliminates the option to present components of other comprehensive income (OCI) as part of the statement of changes in stockholders equity. The amendments in this standard require that all non-owner changes in
stockholders equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. Subsequently, in December 2011, the FASB issued ASU 2011-12, Deferral of the Effective Date
for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income, which indefinitely defers the requirements in ASU 2011-05 to present on the face of the financial statements adjustments for items
that are reclassified from OCI to net income in the statement where the components of net income and the components of OCI are presented. The ASU does not change the items that must be reported in OCI. This update is effective for fiscal years, and
interim periods within those years, beginning after December 15, 2011, with early adoption permitted. The Company is in the process of determining its method of presentation; however, it does not anticipate the adoption of these updates to have
a material impact on its financial statements.

In May 2011, the FASB issued ASU 2011-04 Fair Value Measurement:
Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS. The ASU is the result of joint efforts by the FASB and the International Accounting Standards Board (IASB) to develop a single,
converged fair value framework. While the ASU is largely consistent with existing fair value measurement principles in U.S. GAAP, it expands existing disclosure requirements for fair value measurements and makes other amendments. Key additional
disclosures include quantitative disclosures about unobservable inputs in Level 3 measures, qualitative information about sensitivity of Level 3 measures and valuation processes, and classification within the fair value hierarchy for instruments
where fair value is only disclosed in the footnotes but the carrying amount is on some other basis. This update is effective for interim and annual periods beginning after December 15, 2011. The Company does not expect adoption of this ASU to
have a material impact on the Companys results of operations, financial position or cash flow.

Brady, a Wisconsin corporation, founded in 1914, is an international manufacturer of identification solutions and specialty materials that identify and protect premises, products and people. The Company
is organized and managed on a geographic basis by region: Americas, EMEA (Europe, the Middle East and Africa), and Asia-Pacific. Across these regions, the Company conducts three primary businesses: Brady, Direct Marketing and Die-Cut.

People identification, which includes access control software and products, self-expiring name tags, badges, and lanyards.

Products within the Brady business are sold under the Brady brand through multiple channels, which include
distributors, resellers, and a dedicated direct sales force. The Brady business serves customers in many markets, which include industrial manufacturing, electronic manufacturing, chemical, oil, gas, food and beverage, aerospace defense, mass
transit, electrical contractors, and telecommunications.

The Brady business provides differentiated, proprietary products,
most of which have been internally developed and manufactured. These internally developed products include materials, printing systems, and software.

Direct Marketing Business

Within the Direct Marketing business, the
primary product categories include:

Products within the Direct Marketing business are sold under
a variety of brands through multiple channels, which include catalog, on-line, phone, and telemarketing. The Direct Marketing business serves customers in many markets, which include process industries, manufacturers, government, education,
construction, and utilities.

The Direct Marketing business consists primarily of stock and customer identification products,
and also sells a broad range of related resale products.

Products within the Die-Cut business are sold
through a technical direct sales force, and are supported by global strategic account management. The Die-Cut business serves customers in many markets, which include mobile handset, hard disk drive, consumer electronics, other computing devices, as
well as products for automotive, and medical.

The Company believes that its reputation for innovation, commitment to
quality and service, and dedicated employees have made it a world leader in the markets it serves. The Company operates in Australia, Belgium, Brazil, Canada, the Cayman Islands, China, Denmark, France, Germany, Hong Kong, India, Italy, Japan,
Luxembourg, Malaysia, Mexico, the Netherlands, Norway, the Philippines, Poland, Singapore, Slovakia, South Africa, South Korea, Spain, Sweden, Thailand, Turkey, the United Arab Emirates, the United Kingdom and the United States. Brady sells through
subsidiaries or sales offices in these countries, with additional sales through a dedicated team of international sales representatives in New Zealand, Russia, Taiwan, Vietnam, Central Europe, the Middle East, Africa and South America.

Sales for the quarter ended April 30, 2012, decreased 1.9% to $331.6 million,
compared to $337.9 million in the same period of fiscal 2011. Organic sales decreased 0.5%, acquisitions increased sales 0.2%, and the effects of fluctuations in the exchange rates used to translate financial results into the United States
dollar reduced sales 1.6%. Net income for the quarter ended April 30, 2012, was $27.7 million or $0.52 per diluted Class A Nonvoting Common Share, down from net income of $28.6 million, or $0.54 per diluted Class A Nonvoting Common
Share reported in the third quarter of last fiscal year.

Sales for the nine months ended April 30, 2012, increased 0.5%
to $1,001.7 million, compared to $996.5 million in the same period of fiscal 2011. Organic sales increased 0.4%, divestitures net of acquisitions reduced sales 0.2%, and the effects of fluctuations in the exchange rates used to translate financial
results into the United States dollar increased sales 0.3%. The net loss for the nine months ended April 30, 2012, was $29.6 million or $0.57 per diluted Class A Nonvoting Common Share, down from net income of $79.1 million, or $1.49 per
diluted Class A Nonvoting Common Share reported in the same period of the prior fiscal year. The net loss was a result of a $115.7 million non-cash goodwill impairment charge recorded during the quarter ended January 31, 2012, related to
the former North/South Asia reporting unit within the Companys Asia-Pacific reporting segment. Refer to Note B, Goodwill and Intangible Assets in the Notes to the Condensed Consolidated Financial Statements for further discussion
regarding the goodwill impairment charge.

Results of Operations

The comparability of the operating results for the three and nine months ended April 30, 2012, to the prior year has been impacted by
the following acquisitions and divestiture completed in fiscal 2012 and fiscal 2011.

Fiscal 2012

Acquisition

Segment

Date Completed

Grafo

EMEA

March 2012

Fiscal 2011

Acquisition

Segment

Date Completed

ID Warehouse

Asia Pacific

November 2010

Divestiture

Teklynx

Americas EMEA

December 2010

Gross margin as a percentage of sales decreased to 48.3% from 49.6% for the quarter and to 48.0% from
49.3% for the nine months ended April 30, 2012, compared to the same periods of the previous year. The primary driver of the gross margin decline continued to be the Asia-Pacific region, where competition within the die-cut market has been
significant.

Research and development (R&D) expenses decreased 15.3% to $8.9 million for the quarter and
decreased 10.9% to $28.7 million for the nine months ended April 30, 2012, compared to $10.6 million and $32.2 million for the same periods in the prior year, respectively. As a percentage of sales, R&D expenses decreased to 2.7% in
the third quarter of fiscal 2012 from 3.1% in the third quarter of fiscal 2011, and declined to 2.9% in the first nine months of fiscal 2012 compared to 3.2% in the first nine months of fiscal 2011. The decline in R&D expenses was primarily due
to a decrease in variable incentive compensation for fiscal year 2012 compared to fiscal year 2011, as well as reduced overall R&D spend due to an increased mix of materials projects, which have less development costs than printer and software
projects.

Selling, general and administrative (SG&A) expenses decreased 7.2% to $106.7 million for the three
months ended April 30, 2012, compared to $115.0 million for the same period in the prior year, and decreased 3.6% to $320.5 million for the nine months ended April 30, 2012, compared to $332.4 million for the same period in the prior
year. As a percentage of sales, SG&A expenses decreased to 32.2% from 34.0% for the third quarter, primarily due to a pretax reduction of $6.0 million in variable incentive compensation compared to the same period in the prior year. The decrease
in SG&A expenses as a percentage of sales to 32.0% from 33.4% for the nine months ended April 30, 2012, compared to the same periods in the prior year, was due to the reduction in variable incentive compensation and the continued focus on
reducing SG&A expense through ongoing productivity initiatives. This reduction was partially offset by investments required for growth initiatives.

During the three months ended April 30, 2012, the Company took various measures to
address its cost structure in response to weaker sales forecasts across the Company, as well as the decline in operating results in the Asia die-cut business. As a result of these actions, the Company recorded restructuring expenses of $3.4 million
during the three months ended April 30, 2012, compared to $1.2 million in the same period in the prior year. During the nine months ended April 30, 2012, restructuring expenses decreased to $3.4 million from $7.0 million, compared to the
same period in the prior year. The decrease in restructuring expenses for the nine months ended April 30, 2012, was a result of minimal restructuring charges recorded during the first six months of fiscal 2012 compared to the same period of
fiscal 2011. Restructuring expenses are expected to continue for the next several quarters.

Investment and other income
decreased to $1.1 million from $1.4 million for the three months ended April 30, 2012, compared to the same period in the prior year, and decreased to $1.7 million from $2.9 million for the nine months ended April 30, 2012, compared to the
same period in the prior year. The decrease was primarily due to losses on foreign currency exchange.

Interest expense
decreased to $4.7 million from $5.1 million for the three months ended April 30, 2012, compared to the same period in the prior year, and decreased to $14.7 million from $16.6 million for the nine months ended April 30, 2012, compared
to the same period in the prior year. The decrease was due to the Companys lower principal balance under its outstanding debt agreements.

The Companys effective tax rate increased to 25.9% from 23.1% for the quarter and decreased to (196.1%) from 25.3% for the nine months ended April 30, 2012, compared to the same periods in
the prior year. The effective tax rate for the nine months ended April 30, 2012, was significantly impacted by the non-deductible former North/South Asia goodwill impairment charge of $115.7 million recognized during the three months ended
January 31, 2012. Refer to Note B, Goodwill and Intangible Assets in the Notes to the Condensed Consolidated Financial Statements for further discussion. Excluding the goodwill impairment charge, the effective tax rate was 25.5% for
the nine months ended April 30, 2012.

Net income for the three months ended April 30, 2012, decreased 3.3% to
$27.7 million, compared to $28.6 million for the same quarter of the previous year. Net income as a percentage of sales decreased to 8.3% from 8.5% for the quarter ended April 30, 2012, compared to the same period in the prior year. Net
income before restructuring-related expenses for the quarter ended April 30, 2012 was $30.3 million, an increase of 2.7% from $29.5 million for the same period in the prior year. The Companys net loss was $29.6 million for the nine months
ended April 30, 2012, compared to net income of $79.1 million for the nine months ended April 30, 2011. The Companys net loss before restructuring-related expenses for the nine months ended April 30, 2012, was $26.9 million, a
decrease from net income before restructuring-related expenses of $84.1 million in the same period of the prior year. The net loss was a result of the goodwill impairment charge of $115.7 million recorded during the three months ended
January 31, 2012. Refer to Note B, Goodwill and Intangible Assets in the Notes to the Condensed Consolidated Financial Statements for further discussion. Net income before the impairment charge and restructuring charges was $88.8
million for the nine months ended April 30, 2012, compared to $84.1 million for the same period in the prior year.

Business Segment
Operating Results

The Company is organized and managed on a geographic basis by region. Each of these regions, Americas,
EMEA and Asia-Pacific, has a President that reports directly to the Companys chief operating decision maker, its Chief Executive Officer. Each region has its own distinct operations, is managed locally by its own management team, maintains its
own financial reports and is evaluated based on regional segment profit. The Company has determined that these regions comprise its operating and reportable segments based on the information used by the Chief Executive Officer to allocate resources
and assess performance.

Following is a summary of segment information for the three and nine months ended April 30, 2012 and
2011:

(Dollars in thousands)

Americas

EMEA

Asia-Pacific

TotalRegions

CorporateandEliminations

Total

SALES TO EXTERNAL CUSTOMERS

Three months ended:

April 30, 2012

$

150,629

$

97,938

$

83,062

$

331,629

$



$

331,629

April 30, 2011

$

149,217

$

105,894

$

82,785

$

337,896

$



$

337,896

Nine months ended:

April 30, 2012

$

442,896

$

290,887

$

267,938

$

1,001,721

$



$

1,001,721

April 30, 2011

$

431,216

$

301,985

$

263,292

$

996,493

$



$

996,493

SALES INFORMATION

Three months ended April 30, 2012

Organic

1.9

%

(3.3

)%

(1.2

)%

(0.5

)%



(0.5

)%

Currency

(0.9

)%

(4.7

)%

1.5

%

(1.6

)%



(1.6

)%

Acquisitions/Divestitures

0.0

%

0.5

%

0.0

%

0.2

%



0.2

%

Total

1.0

%

(7.5

)%

0.3

%

(1.9

)%



(1.9

)%

Nine months ended April 30, 2012

Organic

3.5

%

(2.0

)%

(1.9

)%

0.4

%



0.4

%

Currency

(0.5

)%

(1.1

)%

3.0

%

0.3

%



0.3

%

Acquisitions/Divestitures

(0.3

)%

(0.6

)%

0.7

%

(0.2

)%



(0.2

)%

Total

2.7

%

(3.7

)%

1.8

%

0.5

%



0.5

%

SEGMENT PROFIT

Three months ended:

April 30, 2012

$

38,887

$

25,571

$

6,598

$

71,056

$

(388

)

$

70,668

April 30, 2011

$

38,292

$

28,938

$

9,976

$

77,206

$

(3,561

)

$

73,645

Percentage increase (decrease)

1.6

%

(11.6

)%

(33.9

)%

(8.0

)%

(4.0

)%

Nine months ended:

April 30, 2012

$

117,914

$

78,432

$

27,635

(1)

$

223,981

$

(6,009

)

$

217,972

April 30, 2011

$

108,666

$

82,165

$

38,330

$

229,161

$

(12,087

)

$

217,074

Percentage increase (decrease)

8.5

%

(4.5

)%

(27.9

)%

(2.3

)%

0.4

%

(1)

The Company recognized a goodwill impairment charge of $115.7 million during the quarter ended January 31, 2012, related to the former North/South Asia reporting
unit within the Asia-Pacific reporting segment, which is excluded from segment profit as presented in the table above. Refer to Note B, Goodwill and Intangible Assets in the Notes to the Condensed Consolidated Financial Statements for
further discussion.

The Company evaluates short-tem segment performance based on segment profit or loss and customer sales.
Segment profit or loss does not include certain administrative costs, such as the cost of finance, information technology and human resources, which are managed as global functions. Restructuring charges, impairment charges, stock options, interest,
investment and other income and income taxes are also excluded when evaluating performance.

Americas sales increased 1.0% to $150.6 million for the quarter and increased 2.7% to $442.9 million for the nine months ended April 30, 2012, compared to $149.2 million and $431.2 million,
respectively, for the same periods in the prior year. Organic sales increased 1.9% and 3.5% during the quarter and nine-month periods, respectively, compared to the same periods in the prior year. Fluctuations in the exchange rates used to translate
financial results into the United States dollar resulted in a negative impact on sales of 0.9% in the quarter, and 0.5% in the nine-month period. The decrease in sales resulting from the fiscal year 2011 divestiture of Teklynx was 0.3% in the
nine-month period, and did not have an impact on the quarter ended April 30, 2012.

The increase in organic sales of 1.9%
for the quarter and 3.5% for the nine-month period were driven primarily by the Brady business in the United States through new proprietary product launches and increased customer demand within the electrical and data communication markets. The
strong Brady business sales growth was partially offset by a sales decline within the direct marketing business within the regulatory publishing products market.

Segment profit increased 1.6% to $38.9 million from $38.3 million for the quarter, and increased 8.5% to $117.9 million from $108.7 million for the nine months ended April 30, 2012, compared to the
same periods in the prior year. As a percentage of sales, segment profit increased to 25.8% from 25.7% for the quarter, and increased to 26.6% from 25.2% for the nine months ended April 30, 2012, compared to the same periods in the prior year.

The profit improvement for the quarter and nine-month periods ended April 30, 2012, was driven by an improved gross
margin due to selected price increases that went into effect at the beginning of fiscal year 2012, along with increased productivity within the selling expense structure. The actions taken to reduce selling expenses were focused on improving the
productivity and processes of inside sales, field sales, and inquiry management.

EMEA:

EMEA sales decreased 7.5% to $97.9 million for the quarter and 3.7% to $290.9 million for the nine months ended April 30, 2012,
compared to $105.9 million and $302.0 million, respectively, for the same periods in the prior year. Organic sales decreased 3.3% and 2.0% for the quarter and nine-month periods, respectively, compared to the same periods in the prior year.
Fluctuations in the exchange rates used to translate financial results into the United States dollar resulted in a negative impact on sales of 4.7% in the quarter, and 1.1% in the nine-month period. The acquisition of Grafo increased segment sales
by 0.5% during the quarter ended April 30, 2012, compared to the same period in the prior year. The acquisition of Grafo net of the fiscal 2011 divestiture of Teklynx decreased segment sales by 0.6% during the nine months ended April 30,
2012, compared to the same period in the prior year.

The decrease in organic sales of 3.3% in the quarter ended
April 30, 2012, was primarily due to the current economic uncertainty in Europe, compared to the relative stability in the European economy in the same period of the prior year. Specifically, businesses in the U.K., Spain and Italy experienced
sales declines driven by the difficult economic circumstances. The organic sales decline was shared between the direct marketing and Brady businesses throughout the segment. Sales increased by 0.5% due to the acquisition of Grafo, a supplier of
wire-marking products that enabled geographic expansion into South Africa.

Segment profit decreased 11.6% to $25.6 million
from $28.9 million for the quarter, and decreased 4.5% to $78.4 million from $82.2 million for the nine months ended April 30, 2012, compared to the same periods in the prior year. As a percentage of sales, segment profit decreased to 27.0%
from 27.3% for the quarter and decreased to 27.0% from 27.2% for the nine months ended April 30, 2012, compared to the same periods in the prior year.

The decrease in segment profit for the quarter and nine-month period ended April 30, 2012 was primarily due to the organic sales decline. The macroeconomic slowdown in Europe is difficult and
trending downwards. During the quarter ended April 30, 2012, approximately one-half of the Companys restructuring charges related to the European die-cut business. The Company has reallocated resources within countries in order to focus
on growing markets within the Middle East and Central Europe.

Asia-Pacific sales increased 0.3% to $83.1 million from $82.8 million for the quarter, and increased 1.8% to $267.9 million from $263.3
million for the nine months ended April 30, 2012, compared to the same periods in the prior year. Organic sales decreased 1.2% and 1.9% during the quarter and nine-month periods, respectively, compared to the same periods in the prior year.
Fluctuations in the exchange rates used to translate financial results into the United States dollar resulted in a positive impact on sales of 1.5% in the quarter, and 3.0% in the nine-month period. Segment sales increased 0.7% during the nine
months ended April 30, 2012, due to the fiscal 2011 acquisition of ID Warehouse, which had no incremental effect on sales for the quarter ended April 30, 2012.

The decrease in organic sales for the quarter and the year ended April 30, 2012, was
primarily due to weak sales within the die-cut business, as sales to one of the Companys largest customers have declined significantly as a result of the customers loss of market share. During the quarter ended April 30, 2012, the
sales decline was partially offset by the timing of the Chinese New Year, which increased sales by approximately $5.0 million during the second quarter of fiscal 2012 compared to the same period in the prior year.

Segment profit decreased 33.9% to $6.6 million from $10.0 million for the quarter, and decreased 27.9% to $27.6 million from $38.3
million for the nine months ended April 30, 2012, compared to the same periods in the prior year. As a percentage of sales, segment profit decreased to 7.9% from 12.1% in the quarter, and decreased to 10.3% from 14.6% for the nine-month period,
compared to the same periods in the prior year.

The decrease in segment profit for the quarter and nine-month period ended
April 30, 2012, was primarily due to increased competition and declines in sales to the Companys largest die-cut customer as a result of their market share decline. The reduction in segment profit associated with the die-cut business was
partially offset by margin improvement and mix impact from the growing and more profitable Australian businesses.

In addition
to the factors described above, the nine months ended April 30, 2012 were negatively impacted by the residual effects of the Thailand flood through delayed product launches and lower absorption of fixed costs within the segment. Losses caused
by the flooding are expected to be partially covered by property and business interruption insurance. The timing of the insurance recoveries could fall into subsequent periods beyond fiscal year 2012.

Financial Condition

Cash and cash equivalents were $374.4 million at April 30, 2012 and $390.0 million at July 31, 2011, a decline of $15.5
million as summarized below:

Nine months ended:April
30,

(Dollars in thousands)

2012

2011

Net cash flow provided by (used in):

Operating activities

$

100,595

$

110,446

Investing activities

(22,450

)

(10,020

)

Financing activities

(80,641

)

(62,785

)

Effect of exchange rate changes on cash

(13,050

)

21,497

Net (decrease) increase in cash and cash equivalents

$

(15,546

)

$

59,138

Net cash provided by operating activities was $100.6 million for the nine months ended April 30,
2012, a decrease of $9.8 million from cash provided by operating activities of $110.4 million for the nine months ended April 30, 2011. Cash flows from operating activities are generated primarily from operating income and managing the
components of working capital. The decrease in cash flows from operating activities during the nine months ended April 30, 2012, compared to the same period of the prior year was primarily due to a decrease in accounts payable and an increase
in inventory levels.

Net cash used in investing activities was $22.5 million for the nine months ended April 30, 2012,
an increase of $12.5 million from cash used in investing activities of $10.0 million for the nine months ended April 30, 2011. The increase in cash used in investing activities for the nine months ended April 30, 2012, was primarily a
result of the comparison to the prior year divestiture of Teklynx, which generated $13.0 million in cash from the sale transaction. Capital expenditures were $14.5 million for the nine months ended April 30, 2012, compared to $13.7 million
in the same period last year and $20.5 million during the twelve months ended July 31, 2011. The Company expects capital expenditures of approximately $20.0 million for the year ending July 31, 2012.

Net cash used in financing activities was $80.6 million for the nine months ended April 30, 2012, an increase of $17.8 million from
cash used in financing activities of $62.8 million during the nine months ended April 30, 2011. The change was primarily due to $12.3 million used to repurchase common shares during the nine months ended April 30, 2012 compared to the same
period of the prior year.

On October 26, 2011, the Company filed a shelf registration statement on Form S-3 with the
Securities and Exchange Commission (SEC), which will allow the Company to issue and sell, from time to time in one or more offerings, an indeterminate amount of Class A Nonvoting Common Stock and debt securities as it deems prudent
or necessary to raise capital at a later date. The shelf registration statement became effective upon filing with the SEC. The Company plans to use the proceeds from any future offerings under the shelf registration for general corporate purposes,
including, but not limited to, acquisitions, capital expenditures, and refinancing of debt.

During fiscal 2004 through fiscal 2007, the Company completed three private placement note
issuances totaling $500 million in ten-year fixed rate notes with varying maturity dates to institutional investors at interest rates varying from 5.14% to 5.33%. The notes must be repaid equally over seven years, with initial payment due dates
ranging from 2008 to 2011, with interest payable on the notes due semiannually on various dates throughout the year, which began in December 2004. The private placements were exempt from the registration requirements of the Securities Act of 1933.
The notes were not registered for resale and may not be resold absent such registration or an applicable exemption from the registration requirements of the Securities Act of 1933 and applicable state securities laws. The notes have certain
prepayment penalties for repaying them prior to the maturity date.

On May 13, 2010, the Company completed a private
placement of 75.0 million aggregate principal amount of senior unsecured notes to accredited institutional investors. The 75.0 million of senior notes consists of 30.0 million aggregate principal amount of 3.71%
Series 2010-A Senior Notes, due May 13, 2017 and 45.0 million aggregate principal amount of 4.24% Series 2010-A Senior Notes, due May 13, 2020, with interest payable on the notes semiannually. This private placement
was exempt from the registration requirements of the Securities Act of 1933. The notes were not registered for resale and may not be resold absent such registration or an applicable exemption from the registration requirements of the Securities Act
of 1933 and applicable state securities laws. The notes have certain prepayment penalties for prepaying them prior to maturity. The notes have been fully and unconditionally guaranteed on an unsecured basis by the Companys domestic
subsidiaries. These unsecured notes were issued pursuant to a note purchase agreement, dated May 13, 2010.

On
February 1, 2012, the Company and certain of its subsidiaries entered into an unsecured $300 million multi-currency revolving loan agreement with a group of six banks that replaced and terminated the Companys previous credit agreement
that had been entered into on October 5, 2006, and amended on March 18, 2008. Under the new credit agreement, which has a final maturity date of February 1, 2017, the Company has the option to select either a base interest rate (based
upon the higher of the federal funds rate plus one-half of 1% or the prime rate of Bank of America plus a margin based on the Companys consolidated leverage ratio) or a Eurocurrency interest rate (at the LIBOR rate plus a margin based on the
Companys consolidated leverage ratio). At the Companys option, and subject to certain conditions, the available amount under the new credit facility may be increased from $300 million up to $450 million. No borrowings have
occurred under the new credit facility dated February 1, 2012.

The Companys debt and revolving loan agreements
require it to maintain certain financial covenants. The Companys June 2004, February 2006, March 2007, and May 2010 private placement debt agreements require the Company to maintain a ratio of debt to the trailing twelve
months EBITDA, as defined in the debt agreements, of not more than a 3.5 to 1.0 ratio (leverage ratio). The revolving loan agreement dated February 1, 2012, requires the Company to maintain a ratio of debt to trailing twelve months EBITDA, as
defined by the debt agreement, of not more than a 3.25 to 1.0 ratio. The agreement requires the Companys trailing twelve months earnings before interest and taxes (EBIT) to interest expense of not less than a 3.0 to 1.0 ratio
(interest expense coverage). As of April 30, 2012, the Company was in compliance with the financial covenants of the revolving loan agreement, with the ratio of debt to EBITDA, as defined by the agreement, equal to 1.5 to 1.0 and the interest
expense coverage ratio equal to 11.3 to 1.0.

Long-term obligations, less current obligations, as a percentage of long-term
obligations, less current obligations, plus stockholders investment were 20.9% at April 30, 2012 and 22.3% at July 31, 2011. Long-term obligations decreased by $51.1 million from July 31, 2011 to April 30, 2012, which was
primarily due to the $42.5 million debt principal payments made during the nine months ended April 30, 2012. The remaining decrease of $8.6 million from July 31, 2011 to April 30, 2012, was due to the positive impact of foreign
currency translation on the Companys Euro-denominated debt.

Stockholders investment decreased $92.6 million
during the nine months ended April 30, 2012, as a result of the Companys net loss of $29.6 million, as well as the decrease in accumulated other comprehensive income of $33.5 million due to the impact of foreign currency translation, and
the payment of dividends on Class A and Class B Common Stock of $27.3 million and $1.9 million, respectively.

The
Companys cash balances are generated and held in numerous locations throughout the world. At April 30, 2012 and July 31, 2011, approximately 68% and 69% of the Companys cash and cash equivalents were held outside the United
States, respectively. The Companys growth has historically been funded by a combination of cash provided by operating activities and debt financing. The Company believes that its cash flow from operating activities, in addition to its
borrowing capacity, are sufficient to fund its anticipated requirements for working capital, capital expenditures, restructuring activities, acquisitions, common stock repurchases, scheduled debt repayments, and dividend payments. The Company
believes that its current credit arrangements are sound and that the strength of its balance sheet will allow financial flexibility to respond to both internal growth opportunities and those available through acquisition.

Off-Balance Sheet Arrangements  The Company does not have material off-balance sheet
arrangements or related-party transactions. The Company is not aware of factors that are reasonably likely to adversely affect liquidity trends, other than the risk factors described in this and other Company filings. However, the following
additional information is provided to assist those reviewing the Companys financial statements.

Operating Leases 
These leases generally are entered into for investments in facilities such as manufacturing facilities, warehouses and office space, computer equipment and Company vehicles.

Purchase Commitments  The Company has purchase commitments for materials, supplies, services, and property, plant and equipment as part of the ordinary conduct of its business. In the aggregate,
such commitments are not in excess of current market prices and are not material to the financial position of the Company. Due to the proprietary nature of many of the Companys materials and processes, certain supply contracts contain penalty
provisions for early termination. The Company does not believe a material amount of penalties will be incurred under these contracts based upon historical experience and current expectations.

Other Contractual Obligations  The Company does not have material financial guarantees or other contractual commitments that are
reasonably likely to adversely affect liquidity.

Related-Party Transactions  The Company evaluated its affiliated party
transactions for the period ended April 30, 2012. Based on the evaluation the Company does not have material related party transactions that affect the results of operations, cash flow or financial condition.

Subsequent Events Affecting Financial Condition

In May 2012, the Company acquired Runelandhs Försäljnings AB (Runelandhs), based in Kalmar, Sweden for $23.9 million. Runelandhs is a direct marketer of industrial and office
equipment with annual sales of approximately $19.0 million. Its products include lifting, transporting, and warehouse equipment; workbenches and material handling supplies; products for environmental protection; and entrance, reception, and office
furnishings.

In May 2012, the Company acquired Pervaco AS (Pervaco), based in Kjeller, Norway for $12.2 million.
Pervaco is a direct marketer of facility identification products with annual sales of approximately $6.0 million.

On
May 15, 2012, the Board of Directors declared a quarterly cash dividend to shareholders of the Companys Class A and Class B Common Stock of $0.185 per share payable on July 31, 2012 to shareholders of record at the close of
business on July 10, 2012.

Brady believes that certain statements in this Form 10-Q are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements related to
future events included in this Form 10-Q, including, without limitation, statements regarding Bradys future financial position, business strategy, targets, projected sales, costs, earnings, capital expenditures, debt levels and cash flows, and
plans and objectives of management for future operations are forward-looking statements. When used in this Form 10-Q, words such as may, will, expect, intend, estimate,
anticipate, believe, should, project or plan or similar terminology are generally intended to identify forward-looking statements. These forward-looking statements by their nature address
matters that are, to different degrees, uncertain and are subject to risks, assumptions and other factors, some of which are beyond Bradys control, that could cause actual results to differ materially from those expressed or implied by such
forward-looking statements. For Brady, uncertainties arise from the length or severity of the current worldwide economic downturn or timing or strength of a subsequent recovery; future financial performance of major markets Brady serves, which
include, without limitation, telecommunications, manufacturing, electrical, construction, laboratory, education, governmental, public utility, computer, transportation; difficulties in making and integrating acquisitions; risks associated with newly
acquired businesses; Bradys ability to develop and successfully market new products; changes in the supply of, or price for, parts and components; increased price pressure from suppliers and customers; fluctuations in currency rates versus the
US dollar; unforeseen tax consequences; potential write-offs of Bradys substantial intangible assets; Bradys ability to retain significant contracts and customers; risks associated with international operations; Bradys ability to
maintain compliance with its debt covenants; technology changes; business interruptions due to implementing business systems; environmental, health and safety compliance costs and liabilities; future competition; interruptions to sources of supply;
Bradys ability to realize cost savings from operating initiatives; difficulties associated with exports; risks associated with restructuring plans; risks associated with obtaining governmental approvals and maintaining regulatory compliance;
and numerous other matters of national, regional and global scale, including those of a political, economic, business, competitive and regulatory nature contained from time to time in Bradys U.S. Securities and Exchange Commission filings,
including, but not limited to, those factors listed in the Risk Factors section located in Item 1A of Part I of the Companys most recently filed Form 10-K for the year ended July 31, 2011. These uncertainties may
cause Bradys actual future results to be materially different than those expressed in its forward-looking statements. Brady does not undertake to update its forward-looking statements.

Refer to the Companys annual report on Form 10-K for the year ended July 31, 2011. There has been no material change in this
information since July 31, 2011.

ITEM 4. CONTROLS AND PROCEDURES

Brady Corporation maintains a set of disclosure controls and procedures that are designed to ensure that information required to be
disclosed by the Company in the reports filed by the Company under the Securities Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed, summarized and reported within the time periods specified in the SECs
rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports the Company files under the Exchange Act is
accumulated and communicated to the Companys management, including the Companys principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required
disclosure. The Company carried out an evaluation, under the supervision and with the participation of its management, including its President and Chief Executive Officer and its Senior Executive Vice President and Chief Financial Officer, of the
effectiveness of the design and operation of the Companys disclosure controls and procedures pursuant to Rule 13a-15 of the Exchange Act. Based on that evaluation, the Companys President and Chief Executive Officer and Senior
Executive Vice President and Chief Financial Officer concluded that the Companys disclosure controls and procedures are effective as of the end of the period covered by this report.

There were no changes in the Companys internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) that occurred during the Companys most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.